Rapid Acquisition of Mine Resistant Ambush Protected Vehicles	 
(15-JUL-08, GAO-08-884R).					 
                                                                 
About 75 percent of casualties in current combat operations in	 
Iraq and Afghanistan are attributed to improvised explosive	 
devices (IED). To mitigate the threat from these weapons, the	 
Department of Defense (DOD) initiated the Mine Resistant Ambush  
Protected (MRAP) vehicle program, which uses a tailored 	 
acquisition approach to rapidly acquire and field the vehicles.  
In May 2007, the Secretary of Defense affirmed MRAP as DOD's	 
single most important acquisition program. To date, more than $22
billion has been appropriated to acquire more than 15,000 MRAP	 
vehicles, and about 6,600 of the vehicles have been fielded. In  
view of the importance of this program and the significant cost  
involved, Congress asked us to (1) describe DOD's approach for	 
and progress in implementing its strategy for rapidly acquiring  
and fielding MRAP vehicles, and (2) identify the challenges	 
remaining for the program.					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-884R					        
    ACCNO:   A82893						        
  TITLE:     Rapid Acquisition of Mine Resistant Ambush Protected     
Vehicles							 
     DATE:   07/15/2008 
  SUBJECT:   Contract administration				 
	     Defense capabilities				 
	     Defense cost control				 
	     Defense procurement				 
	     Equipment contracts				 
	     Future budget projections				 
	     Indefinite delivery contracts			 
	     Military forces					 
	     Military land vehicles				 
	     Military procurement				 
	     Mission essential operations			 
	     Operational testing				 
	     Procurement evaluation				 
	     Procurement planning				 
	     Product evaluation 				 
	     Program evaluation 				 
	     Program management 				 
	     Protective equipment				 
	     Risk management					 
	     Strategic planning 				 
	     Indefinite quantity contracts			 
	     Program costs					 
	     Program implementation				 
	     Afghanistan					 
	     DOD Mine Resistant Ambush Protected		 
	     Vehicle Program					 
                                                                 
	     Improvised Explosive Device			 
	     Iraq						 

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GAO-08-884R

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The Honorable Neil Abercrombie:
Chairman:
The Honorable Jim Saxton:
Ranking Member:
Subcommittee on Air and Land Forces:
Committee on Armed Services:
House of Representatives: 

The Honorable Gene Taylor:
Chairman:
The Honorable Roscoe Bartlett:
Ranking Member:
Subcommittee on Seapower and Expeditionary Forces: 
Committee on Armed Services:
House of Representatives: 

Subject: Rapid Acquisition of Mine Resistant Ambush Protected Vehicles: 

About 75 percent of casualties in current combat operations in Iraq and 
Afghanistan are attributed to improvised explosive devices (IED). To 
mitigate the threat from these weapons, the Department of Defense (DOD) 
initiated the Mine Resistant Ambush Protected (MRAP) vehicle program, 
which uses a tailored acquisition approach to rapidly acquire and field 
the vehicles. In May 2007, the Secretary of Defense affirmed MRAP as 
DOD's single most important acquisition program. To date, more than $22 
billion has been appropriated to acquire more than 15,000 MRAP 
vehicles, and about 6,600 of the vehicles have been fielded. 

In view of the importance of this program and the significant cost 
involved, you asked us to (1) describe DOD's approach for and progress 
in implementing its strategy for rapidly acquiring and fielding MRAP 
vehicles, and (2) identify the challenges remaining for the program. 

To describe DOD's approach for and progress in implementing its 
strategy for rapidly acquiring and fielding MRAP vehicles, we reviewed 
DOD's plans to buy, test, and field the vehicles and discussed the 
plans with cognizant department and contractor officials. To identify 
the remaining challenges for the program, we reviewed the results of 
testing and DOD's plans to upgrade and sustain the vehicles. We 
conducted this performance audit from June 2007 to July 2008 in 
accordance with generally accepted government auditing standards. Those 
standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe that 
the evidence obtained provides a reasonable basis for our findings and 
conclusions based on our audit objectives. 

Results in Brief: 

DOD used a tailored acquisition approach to rapidly acquire and field 
MRAP vehicles. The program established minimal operational requirements 
and relied heavily on commercially available products. The program also 
undertook a concurrent approach to producing, testing, and fielding the 
vehicles. To expand limited existing production capacity, the 
department awarded indefinite delivery, indefinite quantity (IDIQ) 
contracts to nine commercial sources for the purchase of up to 4,100 
vehicles per year from each vendor.[Footnote 1] To evaluate design, 
performance, producibility, and sustainability, DOD committed to buy at 
least 4 vehicles from all vendors. According to program officials, 
subsequent delivery orders were based on a phased testing approach with 
progressively more advanced vehicle test results and other 
assessments.[Footnote 2] To expedite the fielding of the vehicles, 
mission equipment packages including radios and other equipment were 
integrated into the vehicles after they were purchased. Finally, DOD 
designated the MRAP program as DOD's highest priority acquisition, 
which helped contractors and other industry partners to more rapidly 
respond to the urgent need and meet production requirements. 

While the department's concurrent approach to producing, testing, and 
fielding the vehicles has provided an urgently needed operational 
capability, it has also increased performance, sustainability, and cost 
risks. For example, safety and performance testing is not yet complete, 
and any shortcomings revealed may require design changes or 
postmanufacturing fixes. Operating, maintaining, and sustaining a fleet 
of more than 15,000 fielded vehicles manufactured by at least five 
different vendors could also present significant challenges-- 
especially for the Army, whose fleet will include more than 10,000 
vehicles from five manufacturers. Future budgets could be significantly 
affected by these challenges, particularly since the department is 
still determining its cost estimate to operate and sustain the current 
MRAP quantities. At the same time, DOD is seeking to develop a 
replacement for the ubiquitous high-mobility multipurpose wheeled 
vehicle and to fund various other high-priority weapon systems across 
the services. Finally, as threats change, performance requirements--and 
MRAP's role in DOD's overall tactical wheeled vehicle strategy--could 
change, further exacerbating these challenges. 

Background: 

In February 2005, Marine Corps combatant commanders identified an 
urgent operational need for armored tactical vehicles to increase crew 
protection and mobility of Marines operating in hazardous fire areas 
against IEDs, rocket-propelled grenades, and small arms fire.[Footnote 
3] In response, the Marine Corps identified the solution as the up- 
armored high-mobility multi purpose wheeled vehicle (HMMWV). Over the 
next 18 months, however, combatant commanders continued to identify a 
requirement for more robust mine-protected vehicles. According to the 
acquisition plan, in late 2006 the Marine Corps awarded a sole source 
IDIQ contract and subsequently placed orders for 280 vehicles to 
respond to the urgent requirement while it conducted a competitive 
acquisition for the balance of the vehicles. In February 2007, the 
Assistant Secretary of the Navy (ASN) for Research, Development, and 
Acquisition (RDA) approved MRAP's entry into production as a rapid 
acquisition capability. In September 2007, the Under Secretary of 
Defense for Acquisition, Technology, and Logistics designated MRAP as a 
major defense acquisition program[Footnote 4] with the Navy as the 
Executive Agent and the Marine Corps Systems Command as the Joint 
Program Executive Officer. 

DOD's framework for translating mission needs into systems dictates 
that acquisition programs follow a process that includes: 

* determining the appropriate technologies to be integrated into a full 
system; 

* evaluating through testing whether systems are operationally 
effective, suitable, and survivable; and: 

* reducing manufacturing risk and ensuring operational supportability. 

This process is carried out sequentially with each step being mostly 
completed before the next step begins. The process does, however, 
permit tailoring procedures to achieve cost, schedule, and performance 
goals consistent with applicable laws and regulations. Accordingly, the 
ASN (RDA) directed that the MRAP be acquired as rapidly as possible but 
without skipping any of the mandatory and required steps normally 
associated with an acquisition program. 

Quantities to be fielded quickly grew from the initial 1,169 vehicles 
for the Marine Corps identified in the 2005 urgent need statement to 
the current approved requirement of 15,838 vehicles split between the 
Army, Marine Corps, Navy, Air Force, and Special Operations Command 
(SOCOM), plus 133 for ballistic testing. 

Table 1: Approved MRAP Acquisition Quantities by Military Service and 
Other Users: 

Service: Army; 
Total: 12,000. 

Service: Marine Corps; 
Total: 2,225. 

Service: Navy; 
Total: 544. 

Service: USAF; 
Total: 558. 

Service: SOCOM; 
Total: 378. 

Service: Ballistic testing; 
Total: 133. 

Source: Joint Staff. 

[End of table] 

Three versions of the MRAP vehicle are being acquired for different 
missions: 

* Category I, the smallest version of MRAP, is primarily intended for 
operations in the urban combat environment, and can carry up to 7 
personnel. 

* Category II is a multi-mission platform capable of supporting 
security, convoy escort, troop or cargo transport, medical, explosive 
ordnance disposal, or combat engineer operations, and carries up to 11 
personnel. 

* Category III, the largest of the MRAP family, is primarily intended 
for the role of mine and IED clearance operations, and carries up to 13 
personnel.[Footnote 5] 

MRAP vehicles are purchased without mission equipment--such as 
communications and situational awareness subsystems--that must be added 
before the vehicles can be fielded to the user. The military services 
buy the subsystems for their vehicles and provide them as government 
furnished equipment (GFE) to be installed at a government integration 
facility located at the Space and Naval Warfare Systems Command in 
Charleston, South Carolina. 

DOD also has a requirement for vehicles with enhanced capabilities, 
which adds greater crew protection and mobility against a more advanced 
threat. The Army and Marine Corps are exploring multiple solutions 
including a new vehicle, the MRAP II, and, according to the program 
office, competitively awarded two contracts in December 2007 to 
purchase test vehicles for ballistic and automotive tests. The MRAP II 
solicitation indicated that the resulting IDIQ contracts could be used 
to order production quantities. 

DOD Used a Tailored Acquisition Approach to Rapidly Field a Class of 
Vehicles that Meets Minimum Requirements for Crew Protection: 

DOD adopted a tailored acquisition approach to acquiring the MRAP 
vehicles in order to field the most survivable vehicles as quickly as 
possible. The department awarded indefinite delivery, indefinite 
quantity contracts to nine vendors; implemented a phased test plan that 
emphasizes crew protection; established a delivery schedule to field 
vehicles as quickly as possible; and developed a sustainment concept 
that includes a combination of contractor and military personnel 
logistical support. The program's industry partners facilitated rapid 
fielding by generally meeting or exceeding planned production rates. 

Contracting Strategy Created Flexible Ordering Options: 

To date, the Marine Corps Systems Command, the buying command for the 
MRAP, has issued delivery orders for 14,173[Footnote 6] total vehicles 
or about 90 percent of the current requirement of 15,838 vehicles 
approved by the Joint Requirement Oversight Council. 

Table 2: Planned MRAP Delivery Order Quantities by Vendor: 

Vendor: Navistar Defense; 
Vehicles: 5,214. 

Vendor: Force Protection Industries; 
Vehicles: 3,150. 

Vendor: BAE Tactical Vehicle Systems; 
Vehicles: 2,862. 

Vendor: BAE Ground Systems; 
Vehicles: 2,205. 

Vendor: General Dynamics Land Systems -; 
Canada Corporation; 
Vehicles: 606. 

Vendor: Other[A]; 
Vehicles: 136. 

Total; 
Vehicles: 14,173. 

Source: Joint Program Office. 

[A] These vehicles will not be fielded. 

[End of table] 

DOD recognized that no single vendor could provide all of the vehicles 
needed to meet requirements quickly enough and invited vendors to offer 
their nondevelopmental solutions. The request for proposal made clear 
that the government planned to award one or more IDIQ contracts to 
those vendors that were determined to be the best value to the 
government. The Marine Corps awarded IDIQ contracts to nine vendors and 
issued the first delivery orders in early 2007 for 4 vehicles from each 
vendor for initial limited ballistic and automotive testing. One vendor 
could not deliver test articles in the time required and the Marine 
Corps terminated that contract at no cost to the government. According 
to program officials, vehicles from another vendor did not meet minimum 
requirements and the Marine Corps terminated the contract for 
convenience. These actions reduced the number of vendors to seven and 
the Marine Corps issued a round of delivery orders to five of these 
vendors for a combined total of 395 vehicles. 

As testing on vehicles continued, the Marine Corps issued additional 
delivery orders to two more vendors. In the end, five vendors received 
the bulk of delivery orders; the mix of firms included four that had 
extensive experience producing a high volume of military or commercial 
vehicles and one that was relatively new to mass military vehicle 
production. 

The Marine Corps also contracted for initial sustainment of MRAP 
vehicles. At the early stages of the program, DOD assumed a small 
quantity of vehicles would be needed and they would have a limited 
service life span. Therefore, the IDIQ contracts contained 1 year of 
contractor logistical support with options for additional years. These 
contracts also included one field service representative for every 10 
vehicles.[Footnote 7] As required quantities escalated and a much 
longer vehicle service life span was envisioned, DOD determined this 
approach was not practical and began adjusting its long-term support 
strategy for MRAP vehicles from maintenance by contractors to 
maintenance by military personnel. 

Highly Concurrent Test Strategy Emphasized Crew Protection: 

Conventional DOD acquisition policy dictates that weapons be fully 
tested before they are fielded to the user.[Footnote 8] However, the 
need to begin fielding survivable vehicles as quickly as possible 
resulted in a phased approach designed to quickly identify vehicles 
that met the requirement for crew protection so they could be rapidly 
fielded. The test plan included three phases of developmental tests 
(DT) that incrementally raised the bar and operational test and 
evaluation (IOT&E). This approach resulted in a high degree of overlap 
between testing and fielding of the MRAP vehicles; orders for thousands 
of vehicles were placed before operational testing began and orders for 
thousands more were placed before it was completed. Figure 1 shows the 
concurrent nature of the overall test plan. 

Figure 1: MRAP Developmental and Operational Test Plan: 

This figure is a chart showing the MRAP developmental and operational 
testing plan. 

[See PDF for image] 

Source: GAO based on DOD information. 

[End of figure] 

All three phases of developmental testing--which began in March 2007 
and are scheduled for completion in August 2008--evaluated ballistic 
and automotive performance of vehicles. Phase I included a limited 
evaluation by users. Phase II further evaluated vehicles at the desired 
level of performance against the ballistic threat, added more endurance 
miles to the automotive portion of the test, and included mission 
equipment such as radios and other electronic systems. Phase III raised 
the bar for ballistic performance to the emerging threat and assessed 
nonballistic protection to include near-lightning strikes, high- 
altitude electromagnetic pulse, and nuclear, biological, and chemical 
decontamination tests.[Footnote 9] The automotive portion of the test 
increased endurance to 12,000 miles per vehicle. 

As indicated in figure 1, DOD is also testing vehicles to determine 
their operational survivability, effectiveness, and suitability when 
operated by marines, sailors, and soldiers in simulated operational 
conditions using profiles that reflect missions found in current combat 
operations in Iraq and Afghanistan. Vehicles from four vendors have 
completed operational testing; testing on vehicles from another vendor 
is scheduled to be complete in June 2008. Analysis is planned to be 
complete by August 2008. 

Mission Equipment Installed after MRAP Delivery to Expedite Fielding: 

All MRAP vehicles are delivered to the government without mission 
equipment, which must be added before the vehicles can be fielded to 
the user. Mission equipment includes radios and vehicle intercoms; 
situational awareness hardware such as global positioning systems and 
visual display enhancements; and countermeasures such as IED defeat 
systems. Some of the equipment differs across the services--for 
example, the Army and Marine Corps use different communication systems-
-and each service purchases its own specific government furnished 
equipment (GFE) for installation on its vehicles. 

The Space and Naval Warfare Center (SPAWAR), located in Charleston, 
South Carolina, integrates MRAP vehicles with GFE on 25 integration 
lines prior to fielding. According to a senior SPAWAR official, the 
center provides an optimal location for GFE integration because it has 
an experienced integration workforce; on-site test facility; and 
accessibility to air, ship, rail, and interstate assets. SPAWAR opened 
two other facilities to assist with the integration process: one in 
Orangeburg, South Carolina, provided for a surge capability and served 
as a back-up location in case of a natural disaster at the Charleston 
site. Currently, 13 lines are being used to integrate vehicles and 2 
more lines could be activated if needed. Another site in Kuwait, 
consisting of 5 integration bays, was used to integrate limited numbers 
of one vendor's vehicles destined for delivery to units in the region. 
Integration on those vehicles was completed in May 2008. 

SPAWAR faced initial challenges in starting up the integration facility 
and ramping up installation to meet the demand, but implemented changes 
to overcome the challenges and expedite the process, for example: 

* Before workers could begin installing GFE on any vehicles, it was 
necessary to standardize a process that could be replicated. This 
process differed depending on the vendor, the type of vehicle (such as 
a category I or II, and ambulance), and the military service that would 
use the vehicle. Ultimately, there were 27 major configurations of GFE 
placement on the vehicles. Placement of GFE and antennas also had to be 
tested to ensure that operation of one piece of equipment did not 
interfere with another. 

* Some work must be done on the vehicles before integration can begin, 
costing time. Wiring on the vehicles had to be reconfigured first to 
accommodate the GFE. Also, a rack used to hold communications equipment 
in one vendor's vehicles had to be dismantled, rotated 90 degrees, and 
reinstalled so the equipment would fit. Some of this work is now being 
done by contractors before the vehicles are delivered to the 
government. 

* Vehicles sometimes were received with known missing parts or needing 
work prior to undergoing integration. As a result, a field service 
representative from the vendor would have to correct the problem, which 
sometimes delayed the integration of equipment onto the vehicles. 
According to an official in the Office of the Secretary of Defense, the 
Defense Contract Management Agency, working with SPAWAR, took over 
responsibility to ensure these items were tracked and resolved prior to 
the transportation of these vehicles to theater. 

* Many delivery orders called for vendors to deliver vehicles at the 
end of the month, causing a surge of vehicles to arrive at the same 
time. These peaks in delivery often resulted in a backlog of vehicles 
waiting to begin the integration process. The program office attempted 
to reduce surges in deliveries and establish a continuous flow of 
vehicles by specifying weekly delivery from the five vendors delivering 
the bulk of the vehicles. 

* Vehicles arrived in batches from different vendors, for different 
customers, and of different sizes, which resulted in a mix of vehicles 
being integrated at one time. For example, in the last week in August 
2007, 83 vehicles arrived from five vendors for three different users. 
SPAWAR cross-trained workers to install the GFE on multiple vehicle 
configurations, which according to SPAWAR officials allowed them to be 
more flexible. 

The program office established a goal of completing the integration 
process in 7 days from the day a vehicle arrived at the facility until 
it was ready to ship. The first few vehicles took much longer, but the 
process improved over time. Vehicles bought under the initial IDIQ 
contract began arriving at SPAWAR in early March 2007. The first 10 
vehicles to be integrated did not begin the process for an average of 
almost 14 days and took on average 14 days to be completed.[Footnote 
10] In the first week of September 2007, 15 vehicles were integrated, 
beginning on average 10 days after they arrived and finishing in a 
little more than 9 days on average. During the first week of March 
2008, workers processed 276 vehicles on average in less than 10 days, 
including less than 2 days to actually install the equipment. To date, 
integration has kept pace with production and delivery to theater, and 
in April 2008 SPAWAR integrated the highest number in 1 month--1,157 
vehicles--which exceeded the projected capability of 1,000 vehicles per 
month. 

DOD Communicated Urgency to Industry, and Industry Responded: 

DOD leadership took several steps to communicate the importance of 
producing survivable vehicles as quickly as possible, for example, 

* In May 2007, the Secretary of Defense designated MRAP as DOD's single 
most important acquisition program and established the MRAP Task Force 
to integrate planning, analysis, and actions to accelerate MRAP 
acquisition.[Footnote 11] 

* The Secretary also approved a special designation for MRAP--a DX 
rating--that requires related contracts to be accepted and performed on 
a priority basis over other contracts without this rating.[Footnote 12] 

* The Secretary of the Army waived a restriction on armor plate steel, 
which expanded the countries from which DOD could procure 
steel.[Footnote 13] 

* DOD allocated funds to increase steel and tire production capacity 
for MRAP vehicles as these materials were identified as potential 
limiting factors for the MRAP industrial base. 

* Senior Office of Secretary of Defense officials and lawmakers also 
visited key locations to witness firsthand the efforts of vehicle 
producers and integrators. 

ï¿½ The Joint Requirements Oversight Council (JROC)[Footnote 14] utilized 
the Joint Allocation Distribution Board[Footnote 15] to manage MRAP 
vehicle distribution among the services. 

Major vendors and key subcontractors responded to the urgency 
communicated by the department. According to vendor officials from four 
of the companies, they collectively invested a substantial amount of 
their own capital in anticipation of MRAP work. For example, some 
vendors purchased steel and other critical components in advance of 
delivery orders for MRAP vehicles in order to meet projected time 
lines. In other cases, vendors purchased or developed new facilities 
for MRAP production. Multiple vendors also formed teaming arrangements 
to meet the increase in vehicle delivery demands. 

Ultimately, MRAP vendors have successfully increased their production 
rates to meet the delivery requirement (see fig. 2).[Footnote 16] 
Deliveries began in February 2007 with one vendor delivering 10 
vehicles. By September 2007, the five vendors that received the 
majority of the delivery orders had collectively delivered 871 
vehicles; by March 2008--a little more than a year after the contracts 
were awarded--6,997 vehicles had been delivered. As of May 2008, 
vendors had collectively delivered 9,121 vehicles. Unless additional 
delivery orders are issued, monthly vehicle deliveries will decline as 
manufacture of vehicles under contract ramps back down. 

Figure 2: Actual Versus Planned Production (monthly): 

This figure is a combination line graph showing actual versus planned 
production (monthly). The X axis represents the month and year, and the 
Y axis represents the deliveries. 

[See PDF for image] 

Source: GAO analysis of Joint Program Office data. 

[End of figure] 

Evolving Threats and Rapid Acquisition of MRAP Capability Create 
Challenges: 

Although DOD's MRAP acquisition approach has provided a rapid solution 
to battlefield threats, the approach has also created a number of 
challenges in acquiring and sustaining mine resistant vehicles-- 
challenges that will likely have short-and long-term impacts on 
capability and budgets. First, the highly concurrent test and 
production strategy with its emphasis on crew protection identified 
shortcomings that will need to be corrected and retested, as will the 
next generation of MRAP vehicles. Second, while the program's 
contracting strategy may have helped to maximize vehicle production, 
the long-term sustainment plans to support multiple vehicle designs are 
still being developed. Third, DOD has yet to determine the funding 
required to support the MRAP over the longer term. Finally, evolving 
threats to tactical wheeled vehicles in combat operations are likely to 
affect future acquisitions, operations, and industry capacity to 
produce MRAP and other tactical wheeled vehicles. 

Testing Strategy Provides Little Time for Needed Modifications: 

The highly concurrent test and production strategy for the MRAP vehicle 
helped to quickly identify the vehicles that met requirements for crew 
protection but resulted in the fielding of vehicles with significant 
operational issues as well as the acquisition of a small quantity of 
vehicles that won't be fielded. While most of the vehicles met 
requirements against the ballistic threat in the first phase of 
developmental testing, automotive testing revealed shortcomings in 
reliability, mobility and handling, and safety among all vendors. Some 
of these shortcomings are affecting whether vehicles are suitable for 
some missions.[Footnote 17] 

A number of these issues will require modifying the vehicle designs, 
postproduction fixes, or adapting the way vehicles are used. Changes to 
vehicle design that are introduced into the production line could 
require the retrofitting of thousands of vehicles already delivered, 
potentially impacting the program's cost and delivery schedule. Some of 
the changes to vehicle design will likely result in the need for more 
testing to ensure that the new designs still meet requirements and no 
additional problems exist. These tests, which include automotive and 
ballistic tests for the MRAP II--a more robust version of the baseline 
MRAP--are currently being conducted but won't be completed until spring 
2009. Operational tests for the MRAP II won't be complete until fall 
2009. If tests identify shortcomings, these would also need to be 
addressed and retested, further impacting program cost and schedule. In 
addition, the government issued delivery orders to two vendors for more 
than 100 vehicles that ultimately won't be fielded. Vehicles from both 
of the vendors met the contract requirements and were accepted by the 
government, but multiple problems were discovered during the first 
phase of developmental ballistic and automotive testing that precluded 
their fielding as MRAP vehicles. Most of the vehicles have been 
transferred to another government agency, but disposition on a few 
vehicles is still pending, and the vehicles are in storage. 

Contracting Strategy Creates Sustainment Challenges: 

While procuring MRAPs from multiple vendors accelerated production and 
fielding, it will also complicate vehicle maintenance and support 
because each vendor's vehicle design is unique and requires specific 
operating procedures and maintenance. Over 15,000 vehicles from at 
least five different vendors will eventually be in DOD's fleet. The 
Army's fleet alone will consist of over 10,000 vehicles from five 
different vendors. 

To ease maintenance and support concerns in the near term, the MRAP 
program office established a centralized training entity where 
maintainers can be cross-trained on multiple vendors' vehicles. 
However, this effort is still in the early stages, and the benefit will 
be slow to propagate throughout the services' maintenance 
organizations. In addition, ongoing vehicle upgrades in theater may 
require further upgrades to meet new emerging requirements, further 
complicating maintenance and configuration management efforts. 

DOD's plan for logistical support beyond the first 2 years is still 
being developed. A key challenge for DOD is to effectively manage 
maintenance personnel and vehicle repair parts without sacrificing 
vehicle operational availability. DOD is transitioning from support 
provided by contractor personnel to support provided by military 
personnel. In the interim, a hybrid approach is being used. The 
original logistical support concept was based on a much smaller vehicle 
quantity requirement and shorter assumed vehicle life span. Finally, 
the proprietary nature of these vehicles complicates logistical support 
because some specific vehicle parts must be obtained for each vendor's 
vehicle variant. There is, however, limited component commonality among 
most MRAP vehicle types and with other existing DOD vehicle platforms. 

Long-Term Budget Challenges: 

While the MRAP program is critical to current combat operations, DOD 
has yet to determine the potential affect of the program on its future 
budgets. Program funding to date, consistent with most funding to 
support current combat operations, has largely been provided through 
supplemental appropriations outside the normal budget process or by 
reprogramming of funds already appropriated for other programs to MRAP. 
The total estimated life-cycle cost to upgrade, test, operate, and 
maintain MRAP is still being determined, and total program costs may 
not be included in the department's annual budget request to Congress. 

Since September 2001, funding for current combat operations has 
generally been provided through supplemental appropriations as 
emergency funding. The MRAP program, being a critical part of these 
operations, has also been largely funded through either supplemental 
appropriations or reprogramming of funds already appropriated for other 
programs to MRAP. Congress appropriated about $3 billion in fiscal year 
2007 supplemental funding and approved an additional $1.6 billion for 
reprogramming. Congress also appropriated about $17 billion in fiscal 
year 2008 supplemental funding. This trend will likely continue as seen 
in DOD's recent request for an additional $2.6 billion in fiscal year 
2009 supplemental funding for sustainment. 

While annual emergency appropriations expedite funding for the program, 
they can also obscure future budgetary impacts. Supplemental 
appropriations are not typically included in DOD's long-term funding 
blueprint and are not subject to the same level of scrutiny as the 
regular budget and appropriations process. The military services 
consequently have not had to fully account for long-term budgetary 
affects and will eventually face substantial operational support costs 
in their normal budgetary plans. 

The total estimated life-cycle cost to upgrade, test, operate, and 
maintain the MRAP program is still being determined, as there are many 
key unknown variables such as the Army's final vehicle requirement. 
However, the recently approved acquisition program baseline estimates 
total development and production costs to be almost $29 
billion.[Footnote 18],[Footnote 19] The ultimate price for MRAP will 
depend on future decisions on its role in the department's tactical 
wheeled vehicle strategy and how many, if any, of the fleet will remain 
on active service or how many are stored. 

Long-term sustainment costs for the MRAP program could significantly 
affect future budgets because while the costs to develop and produce a 
weapon system are significant, they usually represent only about 28 
percent of the total ownership costs. Operating and support costs, on 
the other hand, typically represent the highest portion of the total 
ownership cost of a weapon system because they include the cost to 
operate the system and keep it ready for action over many years. Long- 
term sustainment costs for the MRAP could consume a substantial share 
of DOD's budgetary resources because the useful life for MRAP vehicles 
is now estimated at 15 years, much longer than the program office 
initially estimated. In addition, DOD has limited knowledge of vehicle 
reliability and key component replacement rates, which raises further 
concerns about the total life-cycle cost of these vehicles. DOD's Cost 
Analysis Improvement Group has been tasked with independently assessing 
the cost for the program, which should provide more insight into the 
demands the program may place on future budgets. 

MRAP operation and sustainment costs will also compete for limited 
budgetary resources with other major DOD acquisition efforts. The Army, 
which will have in its inventory over 75 percent of all MRAP vehicles 
produced, will be particularly pressed to balance ongoing MRAP 
sustainment costs with competing programmatic and service-level 
priorities, such as its force modernization efforts. MRAP costs may 
compete with other critical programs such as the Future Combat System, 
which is the centerpiece of the Army's effort to transition to a 
lighter, more agile, and more capable combat force and is now estimated 
to cost $160.9 billion. Also, funding to develop the Joint Light 
Tactical Vehicle program, which will replace HMMWVs across the 
services, could be constrained by MRAP funding requirements. 

Affect of Evolving Threat: 

The threat facing tactical wheeled vehicles continues to evolve. When 
DOD began adding armor to the HMMWVs, enemy insurgents responded by 
increasing the size and explosive force of IEDs and by employing 
explosively formed penetrator (EFP) weapons that are capable of 
penetrating heavily armored vehicles. The baseline MRAP vehicle was 
required to provide protection against mines, IEDs, small arms, and 
rocket-propelled grenades. 

DOD is considering increased performance requirements so that MRAP can 
continue to provide required levels of crew protection. This could 
require additional investment in technology and in its application to 
existing and future tactical wheeled vehicle fleets. Multiple efforts 
are under way to improve crew protection of the baseline MRAP vehicle 
against EFP weapons, but doing so will add significant weight to these 
vehicles and potentially compromise other aspects of vehicle 
performance. In addition, some vehicles may require modification before 
the armor can be added. The government has also awarded indefinite 
delivery, indefinite quantity contracts to two vendors for the MRAP II, 
a more robust version of the baseline vehicle. Automotive and ballistic 
tests for those vehicles are currently being conducted. Initial results 
of testing were not available as of May 2008, but both could identify 
shortcomings, which would have to be addressed and retested. 

The evolving threat could also affect DOD's plans for acquiring 
tactical wheeled vehicles. Until the requirements and the acquisition 
quantities to address this threat are determined, DOD will have 
incomplete knowledge of the program's potential role in its tactical 
wheeled vehicle portfolio. This increases the risk of capability 
duplication between its tactical wheeled vehicle systems. 

Finally, DOD's future tactical wheeled vehicle portfolio likely will 
draw on current MRAP suppliers. Until vehicle performance requirements 
and sustainment needs are known, industry's ability to meet total 
tactical vehicle demands cannot be adequately assessed. For example, 
the armor requirement for advanced protection has not been established, 
and its effects on other system components, such as tires and axles, 
have yet to be determined. The armor requirement ultimately determined 
may require additional vehicle design changes that could have ripple 
effects on an industrial base that has already been strained by demands 
for rapid production of new vehicle designs. Future tactical wheeled 
vehicle programs will likely draw on the existing supply base. DOD will 
be reporting on the tactical wheeled vehicle strategy, including the 
MRAP, this summer. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to the Department of Defense, and it 
provided technical comments, which were incorporated as appropriate. 

Scope and Methodology: 

To describe DOD's approach for and progress in implementing its 
strategy for rapidly acquiring and fielding MRAP vehicles, we obtained 
and reviewed budget and planning documents and interviewed numerous DOD 
officials. To evaluate progress in ballistic and automotive testing, we 
obtained and reviewed test plans and reports, and discussed the test 
program with program office and test officials. We observed multiple 
test events at Aberdeen Proving Ground, Maryland and Yuma Proving 
Ground, Arizona. To determine whether the MRAP could be produced in 
sufficient quantities to support requirements, we obtained delivery 
status reports and discussed production issues with program office and 
DOD officials. We also visited four major MRAP prime contractors: BAE 
Tactical Vehicle Systems, Sealy, Texas; BAE Ground Systems, York, 
Pennsylvania; Force Protection Industries, Ladson, South Carolina; and 
Navistar Defense, Warrenville, Illinois, and West Point, Mississippi. 
To determine whether the vehicles were being delivered in a timely 
manner we obtained vehicle deployment status reports, interviewed 
agency and program office officials, and visited the primary 
integration site, the Space and Naval Warfare Center (SPAWAR) located 
in Charleston, South Carolina. 

To identify the short-and long-term challenges remaining for the 
program, we obtained additional information and interviewed officials 
from the Red River Army Depot, Texarkana, Texas; Marine Corps 
Capabilities Development Directorate, Virginia; and Army Operations and 
Plans, Pentagon, Washington, D.C. 

We did not assess whether the Marine Corps Systems Command competitive 
contracting procedures were in accordance with the Federal Acquisition 
Regulation since this was not within the scope of our work. The 
Department of Defense Inspector General is currently conducting a 
review of MRAP contracting procedures and expects to issue a report in 
mid-summer. 

We conducted our review from May 2007 to May 2008 in accordance with 
generally accepted government auditing standards. 

We are sending copies of this report to the Secretary of Defense, the 
Commandant of the Marine Corps, and interested congressional 
committees. We will also make copies available to others upon request. 
In addition, the report will be available at no charge on the GAO Web 
site at [hyperlink, http://www.gao.gov]. If you or your staff has any 
questions concerning this report, please contact me at (202) 512-4841 
or [email protected]. Key contributors to this assignment were David 
Best, Assistant Director; Dayna Foster, Mike Aiken; Charlie Shivers; 
Erin Stockdale; J. Kristopher Keener; and Karen Sloan. 

Signed by: 

Michael J. Sullivan, Director: 

Acquisition and Sourcing Management: 

[End of section] 

Footnotes: 

[1] An IDIQ contract is a type of indefinite delivery contract that 
provides for an indefinite quantity of supplies or services within 
stated limits, during a fixed period. The government places orders for 
individual requirements. Federal Acquisition Regulation (FAR) 16.504. 

[2] Program officials indicated the following factors were included in 
the decision to place orders: Test results, cost, production rates, 
production quality and risks, supportability, avoiding a production 
break, vehicle allocation and configuration, and funding availability. 

[3] Similar needs had also previously been identified by Marine Corps 
commanders going back to January 2004, leading to the development of 
armor kits for tactical vehicles. (See GAO, Defense Logistics: Lack of 
Synchronized Approach between the Marine Corps and Army Affected the 
Timely Production and Installation of Marine Corps Truck Armor, GAO-06- 
274 (Washington, D.C.: June 22, 2006). 

[4] DOD designates acquisition programs based on their location in the 
acquisition process, dollar value, and special interest. A major 
defense acquisition program is a major system with an eventual total 
expenditure for procurement of more than $2.19 billion in fiscal year 
2000 constant dollars. 

[5] Only the Marine Corps will acquire these vehicles. The Army is 
pursuing a separate acquisition program to replace its current fleet of 
vehicles that perform this mission. 

[6] This includes delivery orders for 110 vehicles from the two vendors 
whose vehicles did not meet requirements and will not be fielded. The 
vehicles are in storage awaiting a decision on their disposition. It 
also includes 12 MRAP II test vehicles acquired under different 
contracts. 

[7] Field service representatives provide maintenance support, 
including repair and replacement of major components of the vehicle to 
maintain combat readiness. 

[8] Successful development test and evaluation to assess technical 
progress against critical technical parameters, early operational 
assessments, and the use of modeling and simulation to demonstrate 
system integration are critical prior to beginning production. However, 
the process permits tailoring of the test program when necessary to 
support urgent needs. DOD Instruction 5000.2, Operation of the Defense 
Acquisition System (May 12, 2003). 

[9] Vehicles used in ballistic testing were repaired by vendors to be 
used in subsequent phases of testing. 

[10] This included the time to standardize the process for installing 
the GFE. 

[11] The MRAP Task Force is chaired by the Under Secretary of Defense 
for Acquisition, Technology, and Logistics. The objective of the task 
force is to expedite fielding of MRAP vehicles to support combat 
operations. The task force regularly reports to the Secretary of 
Defense. 

[12] 15 C.F.R. ï¿½ 700.1-.14; DOD 4400.1-M; FAR Subpart 11.6. 

[13] Recent defense appropriation acts have provided that none of the 
funds appropriated therein may be used for the procurement of carbon, 
alloy, or armor steel plate for use in any government-owned facility or 
property under control of the Department of Defense which were not 
melted and rolled in the United States or Canada. If the Secretary of 
the military department responsible makes certain certifications to the 
appropriations committees, this restriction may be waived. See e.g., 
Department of Defense Appropriations Act for Fiscal Year 2008, Pub. L. 
No. 110-116 ï¿½ 8026 (2007); see also, Department of Defense FAR 
Supplement 225.7011-2. 

[14] The JROC is an advisory council that assists the Chairman of the 
Joint Chiefs of Staff in identifying and assessing the priorities for 
joint military requirements to meet current and future military 
capabilities. Chaired by the Vice Chairman of the Joint Chiefs of 
Staff, the council is comprised of a senior officer from each of the 
military services. The JROC approved MRAP vehicle requirements as they 
evolved. 

[15] The Joint Allocation Distribution Board (JADB) coordinates with 
U.S. Central Command (CENTCOM), the military services, and Special 
Operations Command (SOCOM) on the allocation of vehicles to ensure that 
the fielding of MRAP vehicles meets warfighter operational requirements 
and individual service concerns for long-term supportability. The JADB 
is comprised of service, CENTCOM, and SOCOM representatives. 

[16] Parts shortages at two key vendors caused a delivery shortfall in 
January 2008, but the vendors caught up in February and March. 

[17] Specific details on shortcomings cannot be addressed in this 
report due to security classification. 

[18] The $29 billion represents the threshold value, or estimated upper 
limit, of program acquisition costs. 

[19] DOD's Cost Analysis Improvement Group (CAIG) noted that the nature 
of MRAP contracts prevents them from gaining direct access to actual 
cost information, which is a normal part of their cost estimation 
practice. This could raise concerns about the accuracy of future cost 
estimates. 

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